SUBJECT/S: The Government’s unfair Budget and the Australian Economy.

JONATHAN GREEN: Tony Burke is the Shadow Finance Minister, Mr Burke good morning.


GREEN: Federal Government is facing a crisis here. These are massive write downs, $40 billion over the forward estimates according to Goldman Sachs. Should we give up on the Budget getting back into the black?

BURKE: Well there are some issues with the Budget that governments can be in control of, some of them they can’t. Obviously what’s happening with commodity prices, there’s a whole series of global implications there, but what’s been happening with confidence in the Australian economy is quite directly linked to the Government thinking they could have a Budget strategy that didn’t pay any attention to the economy. What you’ve ended up with, is when you hit household budgets in the way they did in that last Budget you end up having an impact on confidence. That’s why business confidence has been tanking, that’s why consumer confidence has been so far down. These are the issues that are entirely within the gift of this government.

GREEN: Surely they pale against the sort of write downs we’re seeing as a result of resource prices, as a result of low inflation, which is leading also to collapsing revenue?

BURKE: And as I say, I’m not going to go after the Government over commodity prices, even though that’s not the way Joe Hockey handled things when he was in Opposition. He argued quite irresponsibly that there was no revenue problem at all, it was only a spending problem. He’s now had to deal with real numbers and see that that is fundamentally untrue and not the state of the Australian economy and not the state of the national Budget. So, I’m acknowledging right upfront about the significance of commodity prices, but no one can pretend that that’s the only issue and that there isn’t a very significant issue with confidence. The shenanigans from the Government over the last week hardly does anything to improve consumer or business confidence in this country.

GREEN: That issue of confidence though, I mean it takes two to tango and doesn’t some of that confidence come from the partisanship around issues around the economy? I mean aren’t the sort of numbers we’re seeing, don’t they point to the fact that the situation for the country is serious and that we should have a sense of bipartisan effort around setting the Budget right around fixing the Australian economy?

BURKE: Well it depends on what the prescription is. When every time you’re given a judgment call you do what this government’s done and go after lower and middle-income households, then Labor will oppose that. They come up with a Budget where they bring in a new GP Tax, having run a campaign on cost of living they bring in a new Petrol Tax, they take absolutely the axe to family payments, they cut the pensions in the face of very clear election promises, they then cut money to schools and hospitals, the ABC and SBS. You know, when you’ve got the combination of the list of lies but also who they’ve chosen to hurt, then of course it’s our job, not just as an opposition but as a Labor party, to stand opposed to that.

GREEN: All of which is easy to criticise, but with $40 billion shortfall over the estimates, with revenue collapsing, with the economy teetering on the brink of deflation, which would further erode that revenue, isn’t it time that from Labor, from your party from the Federal Opposition, we heard some constructive plans about what in fact it would do rather than just criticising what the Government has been attempting so far?

BURKE: Be in doubt there's more than $20 billion worth of savings that have passed the Parliament with…

GREEN: Many others that you’re blocking currently.

BURKE: Yeah and I’ve just gone through why. Some of those measures that have passed the Parliament, like the shift in the family payments cut off from $150,000 down to $100,000, the additional income tax on the top tax bracket that was put in place, they’re measures that were still contrary to election promises made by the Government but we were willing to look at the need for responsible decisions to be taken…

GREEN: A $40 billion shortfall over the estimates, what would you do to cut back, to push the Budget closer to balance around that kind of a number?

BURKE: We’ve made clear that during the course of this year we’ll be starting to make some down payments on the release of different policies that we’ll be taking to the election. We’re still, while it might not look like this from the inside of the Liberal Party party room, we’re still in the first half of the term, we’re not even 18 months into this Government yet. It’s not unreasonable for the Opposition to be at a stage where we’re still formulating and developing policies.

GREEN: There’s commentary in some of the papers today, one piece in particular that talks about policy development under Bill Shorten Labor as being a bit of a black hole.

BURKE: I think Bill made clear last year that this year we’d be defined by the ideas that we’ll be putting forward and that would happen. To make the judgment call on 2015 in the first week of February is probably pushing things a little bit far.

GREEN: Don’t you need to make your own tough choices Tony Burke? Things like superannuation tax concessions, negative gearing, should they go to put some more money into the federal pool?

BURKE: There are a number of measures that we had in place that the Government abolished as soon as they came to office, that we’ve consistently criticised them for, that were revenue raising measures. High income superannuation concessions was part of that, in particular measures to avoid multinational tax avoidance and profit shifting from country to country. These are measures the Government reversed as soon as they came in, we’ve been critical of them for that from day one. There are revenue measure that we had in place that this Government has foregone, let’s not pretend that what the Government has done is simply take every savings option available to them. What they’ve done is they’ve chosen, when it’s a choice between do we take savings from ordinary households or do we take them from big business or multinational companies, they’ve gone after lower and middle-income households every time. That’s why there’s still a large number of measures that we oppose.

GREEN: Tony Burke, thanks for your time.

BURKE: Good to talk to you.


Tony Burke